New Sandy-recovery firm draws lawmaker questions

By Andrew Seidman and Maddie Hanna, Inquirer Trenton Bureau

Posted: April 09, 2014

TRENTON - New Jersey lawmakers on Monday questioned a top Christie administration official on why a firm with a checkered past in post-Katrina recovery appears to have taken on an expanded role in the state's response to Hurricane Sandy.

The state Department of Community Affairs entered into an agreement Jan. 31 with Virginia-based ICF International for the firm to take over some recovery work previously managed by Hammerman & Gainer Inc. of Louisiana, at a cost not to exceed $36.5 million, according to a state document describing ICF's responsibilities.

The firm has agreed to provide staff for the state's nine Housing Recovery Centers and to take over leases for some of the centers from HGI, according to the document.

New Jersey terminated its three-year, $68 million contract with HGI in December without public notice. Richard Constable, the DCA commissioner, told the Assembly Budget Committee on Monday that the state had paid HGI $36 million.

The firm, which administered grants for New Jersey's Rehabilitation, Reconstruction, Elevation, and Mitigation (RREM) program, has billed the state for $58 million, Constable said. HGI filed for arbitration in February.

HGI, which worked as a subcontractor under ICF after Katrina, took over for ICF in Louisiana after the state declined to renew ICF's contract in 2009.

Constable pushed back, saying his department was taking over the bulk of HGI's Sandy workload with a "combination of contractor support."

ICF already had secured a Sandy contract through a competitive bidding process, Constable said, and a provision in its contract allowed for "staff augmentation."

"The expanded role that ICF is playing is not truly an expansion," Constable said. "It was a role that was contemplated in the original bid and contract."

He directed questions about ICF's contract to the state Treasury Department. "We don't know what the value of that contract is," Constable said.

Chris Santarelli, a Treasury spokesman, said ICF's contract, a two-year agreement that began last May, listed $5 million as only an "initial estimate."

The agreement was "an indefinite quantity scope contract," Santarelli said. ICF has billed the state $7.2 million so far, he said.

Santarelli said he was "not sure where the $36 million figure was coming from."

A Jan. 31 state task order - obtained by the Housing and Community Development Network of New Jersey through a public-records request and shared with The Inquirer - outlines services to be performed by ICF and sets a cost limit of $36.5 million.

The order, reported Sunday by the Wall Street Journal, runs through December 2015.

Lisa Ryan, a Department of Community Affairs spokeswoman, said the state was overseeing staff hired by ICF - one of several existing vendors Ryan said the state tapped to support its management of the recovery effort.

The DCA is managing the Housing Recovery Centers, Ryan said, as well as "facilitating the application, grant awards, and construction processes," among other things.

DCA has hired about 15 people since taking over the recovery centers, Ryan said.

Since ICF was awarded its contract last year, Ryan said, the firm has been responsible for developing policies "where the company's expertise in federal policies and procedures is an asset."

In 2006, the Louisiana state legislature voted to end its contract with ICF, but the governor blocked the move. The contract expired in 2009 and was not renewed.

New Jersey found "issues or concerns" with "all bidders" for ICF's contract, Constable said, adding that there are a limited number of firms that can take on disaster-recovery projects.

Schaer also criticized the administration for "dragging its feet" in installing integrity monitors to oversee contractors.

"We're not getting information back," he said. "People can't make evaluations. This is not transparency."

Constable countered that "every contract is publicly available" on the Treasury Department's website.